Lotteries for NYC-sponsored affordable units will now assign 20% of spots, not 50%, to locals. (Last four Atlantic Yards towers NYS-supported, w/no preference.)

A legal settlement announced yesterday put an end, in large part, to the city's community preference policy that assigned half the below-market city-sponsored units in the affordable housing lottery to residents of the local community district.

The rationale for the federal lawsuit, filed in 2015, was that it exacerbated segregation against Black and Hispanic applicants, for example disadvantaging them when seeking affordable housing in Manhattan. 

Moreover, it offered no credit to longtime residents seeking to stay in their neighborhoods; anyone, by virtue of their local address, could be eligible.

Lawyer Craig Gurian of the Anti-Discrimination Center, which brought the lawsuit, said (according to the New York Times) that the agreement showed that “city officials have turned away from the discredited politics of racial turf and said out loud, in words, that all of our neighborhoods need to belong to all of us.”

The defense for the policy, however, was that it gave local elected officials reasons to support affordable housing in their communities. This will have major implications for getting project support by council members and community boards," tweeted Rachel Fee, Executive Director of the New York Housing Conference

The upshot: instead of designating 50% of the affordable units in housing lotteries built via city (not state) subsidies for locals, now only 20% of those slots will be assigned; in five years, the percentage will drop to 15%.

More on the settlement

The settlement notes that the local geographic preference shall only be used or applicable to the first occupancy of a unit, not when a new tenant moves in.

For three years starting March 1, the city will "prominently place" on lottery notifications, “New York City is committed to the principle of inclusivity in all of its neighborhoods, including supporting New Yorkers to reside in neighborhoods of their choice, regardless of their neighborhood of origin and regardless of the neighborhood into which they want to move.”

Some Atlantic Yards asterisks

With Atlantic Yards/Pacific Park, that policy has applied only to three of the eight residential towers, starting with B2 (461 Dean St.), and deserves several asterisks.

First, since the 22-acre project site touches on three Community Districts (CDs 2, 6, and 8), and the lottery was later expanded--thanks to then-Assemblymember Hakeem Jeffries--to include nearby Community District 3, city lotteries already were giving preference to a fairly broad constituency.

Second. given that the need is greatest for lower-income apartments, it was so difficult to find takers for middle-income units at 165% of Area Median Income (AMI) in the 535 Carlton (B14) and 38 Sixth (B3) towers that they were marketed outside the housing lottery. 

That suggests the local preference hardly prevented eligible applicants from getting housing.

Third, the policy only applies to units with city subsidies. The last four Atlantic Yards/Pacific Park towers, limiting their 30% "affordable" units to middle-income units at 130% of AMI, didn't offer the preference at all, since those buildings relied on the state's 421-a tax break.

Those include 662 Pacific St. (B15, aka Plank Road), 18 Sixth Ave. (B4, aka Brooklyn Crossing), and the two-tower 595 Dean St (B12-B13) complex.

Fourth, the new policy, at least retrospectively, conflicts with the rationale for the threatened lawsuit, organized by the BrooklynSpeaks coalition, that in 2014 prompted New York State to agree to a new May 2025 deadline for the project's affordable housing. 

Today, 876 (or 877) units remain to be built, and it's unclear whether the state will impose $2,000/month fines for each missing unit.

The lawsuit was predicated on the notion that a delayed buildout would be racially discriminatory, since Black residents in the four Community Districts would be steadily displaced.

Another asterisk

As The City reported in 2020:

Of the 50,000 new units of affordable housing built or financed since 2014, more than half are concentrated in just ten predominantly Black and Hispanic neighborhoods, from East New York in Brooklyn to Mott Haven in The Bronx, a review of city Department of Housing Preservation and Development data shows.

That suggests that the housing lotteries in those cases would not necessarily exacerbate segregation. However, as the article added, "Competition tends to be fiercest for apartments in predominantly white neighborhoods."

More from the coverage

As the Times noted, a community preference policy dates back to 1988, and has been adopted in various other cities.

As The City noted, the the 50% policy was enacted during the administration of Mayor Michael Bloomberg, who raised the community preference level from 30% to 50% to encourage local support.

Bloomberg's successor, Bill de Blasio, fought the lawsuit, and so did Mayor Eric Adams, at least initially.

The Times noted that one analysis suggested that the policy "helped integrate neighborhoods slightly," since in Community Districts "that were more than 60 percent white and 6 percent Black, the tenants who received affordable units in new developments were 23 percent white and more than 19 percent Black."